EAs Ready for the Internet of Things— Risks and Rewards

When Juniper Research estimated last year that the number of IoT (Internet of Things) connected devices will increase 285 percent from 13.4 billion in 2015 to 38.5 billion in 2020, it confirmed what everyone already knew—IoT is an idea whose time has come.

Along with that comes a recognition of the role that enterprise architects (EA) can play in helping their employers realize the full potential of this concept.

An analyst at Gartner, Inc. pointed out as much when he wrote about how “an IoT architecture strategy is essential to identify opportunities and risks” for businesses.

“Enterprise architects have a great opportunity to position themselves at the heart of digital businesses,” said Mike Walker, research director at Gartner. “This could take the form of establishing a business competency center that explores how the IoT can create innovative breakthroughs for the organization’s business models, products, and services through rapid experimentation.”

Walker went on to identify several trends that make IoT particularly relevant to EA as a discipline. Among them:

Information of everything. This enables detailed insight into what customers want and how to connect their needs with the journey planned by an organization for its customers.

Shift from the “thing” to composition. While individual “things” are perhaps not incredibly interesting, using their connectivity to group them together to measure certain data, or to form new business models and uses, creates almost unlimited potential.

Convergence. Smart, connected technologies don’t just bring together “things”; they link and combine people, places, and information: creating new opportunities.

Next-level business. The IoT will intrude on established procedures by revealing better ways to measure and operate the organization through new and powerful analytics.

“In establishing a business competency center, enterprise architects need to determine the potential impact, both positive and negative, of IoT technologies and then create actionable deliverables that can define which business opportunities should be pursued as result,” Walker said. “The first step is bringing together various business unit and IT leaders to explore how the IoT can impact their respective business domains, and agree on actionable business scenarios that will require deep collaboration between them.”

ALL THAT INFORMATION

Aside from the many opportunities that the IoT will bring to every business, the sheer volume of information being collected will create risks for legal, regulatory, and reputational exposure, noted Walker. The role of the enterprise architect is not only to create new ideas and scenarios, but to properly assess the impact in terms of what information will be generated, what the most important information is, and how it can be protected, if necessary, he added.

Walker believes enterprise architects “are best positioned to discuss and enable the most lucrative opportunities in partnership with business unit and IT leaders.” At the same time, they “must work with chief data officers and security officers to structure this data in a way that mitigates the worst risks of pursuing these opportunities.”

Walker is not alone in his beliefs. In a recent post on the Corso Blog, Zak Cole wrote that “some businesses will be lost, unable to transform and cope with new consumer demands (associated with IoT). That’s why solid enterprise architecture foundations are so important, and potentially the difference between a business floundering in the face of change, or flourishing.”

Cole gave the example of a fast-food chain.

“A customer with a smartwatch and an app for your restaurant walks into your store, triggering the app to automatically order the customer’s ‘usual’ and debit the user’s bank account,” he wrote. “However, you’ve recently changed your menu, perhaps as soon as the day before, and the customer’s order is no longer available.

“Without the foresight of good preparation and efficient systems, that customer would order something that no longer exists, be billed for that order, and be left waiting for their usual order indefinitely, most likely resulting in an unhappy customer who might even think twice about using your services in the future.”

While the risk is at one end of the spectrum, there is also a reward, according to Cole.

“Due to the nature of IoT, the ‘things’ are often gold mines of useful data. This data can be measured to review the business’ current systems, or even identify new avenues for the business in the future.”